A subsidiary of Occidental Petroleum is planning to build the world’s largest plant designed to capture carbon dioxide (CO2) directly from the air in the oil and gas fields of West Texas, with a startup date sometime in 2024.
Once fully operational, the plant will capture up to 500,000 metric tons of carbon dioxide per year, with the capability to scaleup to 1 million metric tons per year. Direct air capture is a nascent technology that extracts CO2 directly from the atmosphere and stores it underground (or uses it to make fizzy drinks or other products).
While many carbon sequestration experts see the technology as a promising, if expensive, process to remove climate-warming greenhouse gases from the air, major concerns remain about how much of the captured carbon will be pumped back down into the Permian Basin to help Occidental to extract more oil or gas from difficult-to-reach reserves. Critics also wonder how trustworthy the monitoring will be, and how communities and the environment might be impacted by its large-scale application.
For now, Occidental – one of the largest petroleum producers in the country – has a subsidiary, called 1PointFive, that is taking advantage of billions of federal decarbonization dollars up for grabs under new government subsidies to invest in climate tech solutions to global warming. Meanwhile, Occidental will still be pumping out oil and gas responsible for heating the atmosphere. It will be simultaneously profiting from fossil fuel extraction and carbon capture.
The oil and gas company is also attracting revenue from corporate partners. These partners claim that it is good for the climate that they will be paying Occidental to “offset”– or make up for – their greenhouse gas emissions through direct capture while the partners continue to pollute.
For example, the National Football League’s Houston Texans recently announced that they have selected Occidental’s subsidiary as a “preferred carbon removal partner” to offset their flight emissions. Occidental is marketing not only carbon credits but also what they call “net-zero oil” to NFL teams and airlines. According to Occidental, net-zero oil will be attained by removing, via direct air capture, enough emissions to offset all the emissions associated with the oil’s lifecycle from extraction to consumption.
In November, Occidental announced plans for an even bigger direct air capture site in Texas. Occidental has leased 106,000 acres of the 825,000-acre King Ranch, located in South Texas near the Eagle Ford Shale oil and gas field. The company says the land can support up to 30 direct air capture projects that could potentially remove up to 30 million metric tons of CO2 per year, storing up to up to 3 billion metric tons of CO2 in the geologic reservoirs below the ranch.
This storage capacity would be orders of magnitude larger than that provided by the 18 existing direct air capture plants around the world, which capture just 0.01 million metric tons of CO2 each year.
While the latest United National Intergovernmental Panel on Climate Change (IPCC) climate report calls carbon removal essential to meeting climate targets, it also warns of over-relying on notions like direct air capture, which may lull policymakers and perhaps the general public into a false sense of security as to the necessity of deep cuts to emissions now.
Anthony R. Kovscek, a professor of petroleum engineering at Stanford University who studies carbon sequestration, worries that the public might reach a different misunderstanding relating to direct air capture.
“My most substantial concern about direct air capture is that lack of public understanding of the capture process will lead to negative opinions and the withdrawal of government support before the technology is fully developed and evaluated,” said Kovscek.
Currently, initiatives taken through the Inflation Reduction Act and Bipartisan Infrastructure Law aimed at reducing greenhouse gas emissions are providing the incentive to advance carbon sequestration projects and for businesses to seek out credits. Federal tax credits within the Inflation Reduction Act designate direct air capture projects a $180-per-metric-ton credit, far above the previous $50 allotment.
Kovcek believes Occidental’s efforts to be aimed at developing a technology that allows them to use their existing engineering and geosciences expertise as well as sequestration storage space that the company already has rights to use.
"If it’s successful, they will have a new business that potentially outlasts hydrocarbon production and performs a necessary service,” said Kovcek. “Because they are trying to develop a new business, I don’t think that what they are doing is greenwashing.”
Greenwashing or not, for the time being direct air capture and carbon sequestration overall face no shortage of obstacles on the road to contributing significantly to decarbonization. The process remains very expensive and energy intensive and could divert resources and attention from renewable energy projects with more clear-cut benefits. Furthermore, the geologic reserves capable of sequestration are often located far away from carbon emitters such as steel plants and might require substantial investment in new pipelines.
Kenneth B. Medlock III, Senior Director of the Center for Energy Studies at Rice University’s Baker Institute for Public Policy, said he believes even if Occidental is not generating truly “net-zero” oil, it is still resulting in a net CO2 reduction, which can buy time for other technologies.
“It is an intriguing step in the multitude of options being presented for reducing the net carbon footprint of energy,” Medlock said. “It also can leverage existing infrastructures and business models, which can bode well for its future as the technology develops.”
The Infrastructure Bill designated $3.5 billion towards the establishment of large-scale, regional direct air capture hubs across the U.S. In response to the announcement, the Climate Justice Alliance released a letter calling direct air capture, “an unproven technology that allows fossil fuel extraction and use to continue, resulting in ongoing harm to frontline communities.”
“To have any significant effect on global CO2 concentrations, DAC would have to be rolled out on a vast scale, demanding very large amounts of water and energy, and raising environmental justice concerns about the toxic impacts of the chemical absorbents used in the process,” the letter states.
Medlock believes that environmental justice (EJ) concerns about Occidental’s direct air capture are minimal, since the projects are set in remote locations, but that going forward they must be kept front-and-center in the discussion.
“As with all new energy infrastructure, EJ assessments are critical to siting and operation,” he said regarding Occidental’s plans. “So, it is incumbent on the industry to internalize EJ asit moves forward, which requires direct engagement with communities and a conscious effort to avoid injustices.”
Erin Burns, Executive Director of Carbon180, a climate nonprofit organization focused on carbon removal solutions, said that direct air capture is “an effective means of removing emissions that drive climate impacts and injustice.” But she added that, more broadly: “carbon removal can’t slow efforts to rapidly decarbonize and can't be an excuse to keep using fossil fuels in the US.”
Because of this, Burns believes that federal government should not fund enhanced oil recovery projects in which the sequestered CO2 is used to extract more fossil fuels , such as the Occidental Permian Basin project, and Carbon180 has advocated for its specific exclusion from key federal direct air capture projects.
Burns said trust underpins the success of this field and the ability to achieve gigaton scale carbon removal by 2050.
“But before we can build trust in direct air capture, robust monitoring, reporting, and verification – MRV – is a fundamental prerequisite,” Burns said. “MRV is the process of accounting for all the emissions, energy use, environmental and public health impacts associated with a carbon removal project to determine its net climate impact. It tells us if the work was done safely and effectively and provides receipts.”
According to Occidental’s agreement with the Houston Texans, the carbon credits purchased will not be linked to any new oil and gas extraction. Instead, the CO2 will be sequestered in reserves not associated with fossil fuel production. However, this agreement is specific to a carbon offset agreement with one NFL team. And it not clear how much independent verification there will be, or if – in other business agreements or contexts -- Occidental will use captured carbon to inject into shale formations to help extract oil and gas.
Aside from the two Texas direct air capture projects, Oil & Gas Watch is also tracking the Sweetwater Carbon Storage Hub, a proposed direct air capture project in Wyoming that would consist of modular carbon capture units capable of removing 12,000 tons of CO2 per year from the air.
Lead photo: Artist rendering of what a large-scale Direct Air Capture plant will look like. Credit: Carbon Engineering